Screen Digest predicts major increase

HONG KONG — The legitimate DVD market in China will grow fourfold in four years, according to forecasts from U.K. research house Screen Digest.

But the growth could be faster still were the market not dominated by pirated goods, the report adds.

Screen Digest’s “Cinema and Home Entertainment in China” report says 70 million discs, worth $115 million, were sold legally in China in 2006. The declining market for low-tech VCDs was worth a further $50 million.

Company forecasts the market could grow to $500 million by the end of 2010. It points to a growing group of wealthy urbanites who are rapidly buying home entertainment systems. That group could number 143 million by 2010. At that stage, China would account for a quarter of the world’s DVD-equipped homes.

With an estimated 2 billion pirated discs sold each year, the black market dwarfs the legitimate sector. Screen Digest says removal of restrictions on the legitimate market would allow it to flourish.

“While the government is understandably keen to protect the cultural identity of China, market liberalization will in turn push China’s video industry to a more prominent position in the world,” Screen Digest’s Asia-Pacific analyst, David Scott, said. “This would give China the opportunity to make full use of the foreign distribution channels set up by multinationals to introduce its products abroad and gradually gain a larger share of the international entertainment business.”

The researcher sees three positive signs for growth. These include meaningful steps being taken by authorities to tackle piracy, the booming film production sector and attempts to spread cinema to rural areas.

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